Besides what they're selling, it's also damaging the longstanding social contract between Putin and the Russian people: Turn a blind eye to the way I run things and I'll make sure your life continues as normal. This is breaking that contract.

Other dictators did this too. Hitler kept a bunch of very nonessential things running far longer than he should have in order to try and preserve some level of normalcy for the German people. The Nazis actually had monthly reports, "Meldungen aus dem Reich" ("Reports from the Reich") on what the public were thinking about various things, which were distributed to top Nazi leaders. They stopped publishing them some time in 1944 because by then you didn't need secret reports any more to know what the public were thinking.